World Gold Coun­cil Calls for Cut in Im­port Duty This will help the or­gan­ised sec­tor gain mar­ket share and re­duce smug­gling which could sur­pass 120T this year, says coun­cil

The Economic Times - - Finance & Commodities - Su­tanuka.Ghosal @times­group.com

Kolkata: The World Gold Coun­cil has said the gov­ern­ment should re­duce the im­port duty on gold fol­low­ing the in­tro­duc­tion of 3% goods and ser­vices tax (GST), rea­son­ing that this will help the or­gan­ised sec­tor gain mar­ket share and re­duce smug­gling of gold which may oth­er­wise sur­pass 120 tonnes this year.

At present, gold at­tracts 10% im­port duty, which was raised in a phased man­ner by the erst­while UPA gov­ern­ment to put a check on the bal­loon­ing cur­rent ac­count

deficit (CAD). “The key eco­nomic in­di­ca­tors are favourable for re­duc­ing the im­port duty on gold. CAD is un­der con­trol, ru­pee is

strong against dol­lar and the eq­uity mar­ket is also ro­bust. This calls for a re­duc­tion in im­port duty on gold,” said So­ma­sunda- ram PR, man­ag­ing di­rec­tor, In­dia at the World Gold Coun­cil. “GST is mak­ing the trade tax com­pli­ant and bring­ing in more trans­parency. So, if the im­port duty is re­duced, then smug­gling will come down sig­nif­i­cantly and make the trade more or­gan­ised.”

Bul­lion deal­ers and jew­ellers, too, said that the time is ripe for a re­duc­tion in im­port duty. “I think the gov­ern­ment can take a de­ci­sion af­ter look­ing at GST col­lec­tion fig­ures on gold. More tax col­lec­tion will help the gov­ern­ment de­cide on re­duc­tion in duty,” said Suren­dra Me­hta, na­tional sec­re­tary, In­dia Bul­lion and Jew­ellers As­so­ci­a­tion.

Traders said that although un­der­ly­ing con­cerns about GST and other trans­parency mea­sures con­tinue, pos­i­tive sen­ti­ment re­turned with con­tin­ued re­mon­eti­sa­tion and ex­pec­ta­tions of a good mon­soon.

This was ev­i­dent in the sales mo­men­tum dur­ing Ak­shaya Tri­tiya, sup­ported by a higher num­ber of aus­pi­cious wed­ding days dur­ing the quar­ter.

To­wards the end of quar­ter, one of the big­gest de­mand driv­ers was the goods and ser­vices tax rate on gold, which spurred con­sumers and traders to ad­vance their gold pur­chases ahead of the GST roll-out on July 1.

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